NOTE 2 - FEDERAL FUNDS SOLD AND SECURITIES FINANCING ACTIVITIES

Federal Funds Sold and Securities Borrowed or Purchased Under Agreements to Resell

Fed funds sold and securities borrowed or purchased under agreements to resell were as follows:



(Dollars in millions)	June 30, 2016		December 31, 2015
Fed funds sold		$5		$38
Securities borrowed	332		277
Securities purchased under agreements to resell	770		962
Total Fed funds sold and securities borrowed or purchased under agreements to resell		$1,107		$1,277

Securities purchased under agreements to resell are primarily collateralized by U.S. government or agency securities and are carried at the amounts at which the securities will be subsequently resold. Securities borrowed are primarily collateralized by corporate securities. The Company borrows securities and purchases securities under agreements to resell as part of its securities financing activities. On the acquisition date of these securities, the Company and the related counterparty agree on the amount of collateral required to secure the principal amount loaned under these arrangements. The Company monitors collateral values daily and calls for additional collateral to be provided as warranted under the respective agreements. At June 30, 2016 and December 31, 2015, the total market value of collateral held was $1.1 billion and $1.2 billion, of which $215 million and $73 million was repledged, respectively.

Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase are accounted for as secured borrowings. The following table presents the Company’s related activity, by collateral type and remaining contractual maturity:



	June 30, 2016						December 31, 2015
(Dollars in millions)	Overnight and Continuous		Up to 30 days		Total		Overnight and Continuous		Up to 30 days		Total
U.S. Treasury securities		$3		$—		$3		$112		$—		$112
Federal agency securities	164		—		164		319		—		319
MBS - agency	993		13		1,006		837		23		860
CP	116		—		116		49		—		49
Corporate and other debt securities	239		94		333		242		72		314
Total securities sold under agreements to repurchase		$1,515		$107		$1,622		$1,559		$95		$1,654

For these securities sold under agreements to repurchase, the Company would be obligated to provide additional collateral in the event of a significant decline in fair value of the collateral pledged. This risk is managed by monitoring the liquidity and credit quality of the collateral, as well as the maturity profile of the transactions.

Netting of Securities - Repurchase and Resell Agreements

The Company has various financial assets and financial liabilities that are subject to enforceable master netting agreements or similar agreements. The Company's derivatives that are subject to enforceable master netting agreements or similar agreements are discussed in Note 13, "Derivative Financial Instruments." The following table presents the Company's securities borrowed or purchased under agreements to resell and securities sold under agreements to repurchase that are subject to MRAs. At June 30, 2016 and December 31, 2015, there were no such transactions subject to legally enforceable MRAs that were eligible for balance sheet netting.

Financial instrument collateral received or pledged related to exposures subject to legally enforceable MRAs are not netted on the Consolidated Balance Sheets, but are presented in the following table as a reduction to the net amount reflected on the Consolidated Balance Sheets to derive the held/pledged financial instruments. The collateral amounts held/pledged are limited for presentation purposes to the related recognized asset/liability balance for each counterparty, and accordingly, do not include excess collateral received/pledged.



(Dollars in millions)	Gross Amount		Amount Offset		Net Amount Presented in Consolidated Balance Sheets			Held/Pledged Financial Instruments		Net Amount
June 30, 2016
Financial assets:
Securities borrowed or purchased under agreements to resell		$1,102		$—		$1,102	¹		$1,092		$10
Financial liabilities:
Securities sold under agreements to repurchase	1,622		—		1,622			1,622		—

December 31, 2015
Financial assets:
Securities borrowed or purchased under agreements to resell		$1,239		$—		$1,239	¹		$1,229		$10
Financial liabilities:
Securities sold under agreements to repurchase	1,654		—		1,654			1,654		—

¹Excludes $5 million and $38 million of Fed funds sold, which are not subject to a master netting agreement at June 30, 2016 and December 31, 2015, respectively.